CA Code & Ethics Flashcards
The California Insurance Code
provides for the formation of a Department of Insurance, which has broad regulatory powers to enforce the insurance law
- regulates capitalization and reserve requirements
- established by the state legislature
The Insurance Commissioner
In charge of the Insurance Department, elected to office by the people, place, and manner as the Governor
Elected to a four-year term
The California Code of Regulations (CCR) Title 10, Chapter 5
Regulations include standards for approval and disapproval of names of insurance producers, continuing education requirements, record keeping
Penalties for transacting insurance business in Cali without license or certificate of authority
Imprisonment in state prison or county jail for up to one year
- Fine of up to $100k
- Both imprisonment and fine
Insurance Solicitor
A natural person employed to aid an insurance agent or insurance broker in transacting insurance other than life insurance
Insurance Agent
A personal authorized by and on behalf of an insurer to transact all classes of insurance other than life insurance
Third-Party Administrator
Acts a s a liaison between the insurer and the employer in matters such as certifying eligibility, preparing reports required by the state and processing claims
Life and Health Agent
A person authorized by and on behalf of a life, or life and disability insurer to transact life or disability insurance or both
Insurance broker
A person who for compensation and on behalf of another person transacts insurance other than life insurance with, but not on behalf of an insurer
If an agent has not kept any records, the Commissioner may require them to establish records within how many days
60
Surplus Lines (SL) Broker
is an insurance professional who negotiates coverage on your behalf from an excess and surplus lines (E&S) insurer. E&S insurers specialize in risks that standard insurers won’t cover. They are nonadmitted, meaning they operate in states in which they aren’t licensed.
Agent who sells LTC must have how many hours of specific training
8 hours of specific training in that area is required and four hours of annual education is required
Pretext Interview
An interview in which the party gathering information refuses to reveal their identity, pretends to be someone else, misrepresents the true purpose of the interview or pretends to represent someone who is not in fact represented.
- is Illegal except when an insurer is investigating fraud or material misrepresentation
California Insurance Code 700
prohibits the tying of an insurance transaction to a loan
Penalty for an unfair claims settlement practice
5k per act and 10k if the act is willful
Perjury
the offense of willfully telling an untruth in a court after having taken an oath or affirmation
Alien Insurer
is an insurance provider offering coverage in a country other than the company’s home country. The relationship between the country of incorporated and the location where it sells a given policy defines if an insurer is alien.
Special Investigative Unit
In insurance companies - they have to have a special division dedicated to the prevention and detection of fraud
Certificate of Authority
An admitted insurer must have a certificate of authority before transacting insurance in the state of California
Demutualization
process by which a mutual insurer becomes a stock insurer
is a process by which a private, member-owned company, such as a co-op, or a mutual life insurance company, legally changes its structure, in order to become a public-traded company owned by shareholders
Conservation
when the commissioner takes control of an impaired insurer affairs in order to improve its financial condition
Mutual Companies are sometimes referred to as
Participating companies because the policy owners participate in dividends
An insurer chartered under the laws of New York and headquartered in Chicago would be considered which type of insurer in California
Foreign - an insurance company headquartered in another state is a foreign company
Monetary penalty for unfair discrimination
$1k to 5k plus court costs
Statute of Limitations
a law prescribing the period within which certain types of causes of action must be brought. … Actions for declaratory judgment in an insurance coverage matter are generally held to be governed by the statute of limitations for suits on written contracts, which vary in length from state to state.
Acting without a producer license is
a misdemeanor and punishable by a $50k fine and or 1 year in jail
Life agents must maintain records of client transactions for a minimum of
5 years
